The Role of In Vitro Diagnostics (IVD) in Saudi Arabia’s ... THE CONTRIBUTION, VALUE AND FUTURE OF IN VITRO DIAGNOSTICS (IVD) IN SAUDI ARABIA’S HEALTHCARE SYSTEM I. An Introduction

The Role of In Vitro Diagnostics (IVD) in Saudi Arabia’s Healthcare System

THE LABORATORY TEST IN SAUDI ARABIA:

King Abdul-Aziz Medical City-RiyadhNational Guard Health Affairs

Ministry Of National GuardKingdom Of Saudi Arabia

Department of Pathology and Laboratory Medicine, King Abdulaziz Medical City, Riyadh

Clinical Scientist, Molecular Microbiology, King Abdulaziz Medical City, Riyadh

Dr. Abdulaziz Al Ajlan, MD

Dr. Javed Akhter, Ph.D

Chairman

Head of Laboratory Quality Management and Health & Safety

| Authors

King Abdulaziz Medical City, Riyadh provides primary, secondary and tertiary service with a capacity of 2,000 beds and approximately 3 million outpatient visits a year. It has established itself as a center of excellence as it has the largest Emergency Care Center in the Middle East, a state of the art Hepatobiliary Sciences and Liver Transplant Center, a state of the art Cardiac facility, Long Term and Extended Care Services for patients requiring long-term nursing care, and the recently commissioned Oncology Unit. Other newly commissioned projects include: The King Abdullah Specialist Children’s Hospital, which is the first children’s medical referral institute in Saudi Arabia, the King Abdullah’s International Medical Research Center and the new 23,000 sqm Central Laboratory. The Department of Pathology & Laboratory Medicine is a large and modern medical laboratory accredited by the College of American Pathologists (CAP) and the American Association of Blood Banks (AABB).

Solidiance is an established Asia-focused management consulting firm entrusted by Fortune 500s and conglomerates to support growth across emerging and developing markets in Asia. Solidiance works side-by-side with clients delivering and implementing comprehensive growth strategies across Asia from our 10 offices between Turkey and Japan. Solidiance supported the development of this white paper by providing a third-party verification and validation of the market data, interviewing stakeholders across the Saudi healthcare landscape, and playing the role of Editor to deliver a finished product.

| About King Abdulaziz Medical City

| About Solidiance

2

Solidiance

Erika Masako WelchDirector of Business Development Middle East

| Editor

3THE CONTRIBUTION, VALUE AND FUTURE OF IN VITRO DIAGNOSTICS (IVD) IN SAUDI ARABIA’S HEALTHCARE SYSTEM

I. An Introduction to in vitro diagnostics (IVD) 5 Comprehensive Role of Diagnostics 5 Spotlight on IVD Applications 6 Benefits of IVD 6 IVD Demand is Growing Globally 7II. Healthcare in the Middle East & North Africa 8 Regional Pressure Points 8III. KSA Healthcare Trends 10 Demographic Shifts in Saudi Arabia 10 High Incidence Rates of Lifestyle Related Diseases 11 Growing Demand for Private Healthcare Services 15 Strategic Healthcare Investments by Government 17IV. The Role of IVD in Saudi Arabia 19V. Conclusions 20VI. References 21

Table of Contents

4


An InTroduCTIon to in vitro diagnostics (IVD)

With increasing cases of new strains of viruses, epidemic and pandemic diseases, healthcare professionals are innovating healthcare solutions to improve the combat of, and cure for, diseases worldwide. Among these innovations is in vitro diagnostics (IVD). IVD plays a significant role in saving people’s lives by providing accurate diagnosis and prognosis, which enables improved monitoring and treatment. Both public and private healthcare officials consistently rate quality care and value-for-money as key priorities in health care; as such, there is a strong need to have high quality laboratory testing.

IVD, more universally known as ‘laboratory tests’, can be defined as a test performed in a controlled environment outside a living organism to help and support a diagnosis. IVDs are medical devices and accessories used to perform tests on samples, (e.g. blood, urine, tissue and other body fluids from the human body) in order to help detect infection, diagnose a medical condition, prevent disease, and monitor drug therapies. It can be used to detect complex virus strains and infectious diseases such as Ebola and MERs at hospitals with sophisticated molecular technology including reagents, instrumentation and software, or it can be as simple as performing a pregnancy test at home.

Risk Assessment

Screening Diagnosis Staging and Prognosis

Therapy Selection

Monitoring

Diagnostic test to complement traditional risk factors

Diagnostics help clinicians optimally manage patients through the continuum of care.

Implement wellness program proactively

Applied to high-risk patient to identify disease early

Nip disease in the bud with early treatment

Use for definitive diagnosis and general typing

Refer to the appropriate specialist

Assess severity and/or risk of recurrenceInform adjuvent therapy decision

Determine whether treatmet is necessary

Used to predict efficacy or safety response to specific treatments

Do not waste unproductive therapy

Recurrence monitoring Momonitoring for treatment efficacy

Control disease progression with changes in treatment

Description

Comprehensive Role of Diagnostics

Clinical Implications

Source: DxInsights White Paper January 2012

6

IVD can be classified into 3 main types: (a) clinical laboratory testing, (b) point of care testing, and (c) self-testing.

The IVD market is also distributed by laboratory specializations (e.g. anatomic pathology, immunology, molecular diagnostics, hematology and microbiology), or by product-type (e.g. instruments and reagents), or by applications to diseases (which comprise mainly of, but are not limited to, diabetes, oncology, cardiology, HIV/AIDS, autoimmune disease and nephrology).

Benefits of IVD

Spotlight on IVD Applications

IVD enables timely and accurate diagnosis, enables reduction in the incidence rate of diseases, and provides significant cost-savings. Research has shown that IVD adoption can bring significant benefits to healthcare, including reduction of Staph infection incidence rates by ~70%, cervical cancer rates by ~75%, and cancer reoccurrence rates and death by ~50%.

In the USA, the use of regular screening, such as Pap Tests for women, has contributed to the significant reduction in incidence rate and mortality from cervical cancer – by up to 75-80%. The diagnostic laboratory uses more than 1,600 different tests today, mostly provided by the in vitro diagnostic industry.

Diagnostics represent only ~2% of global healthcare spending, but are critical to medical decision-making. A research in North America has found that approximately 60% of all medical decisions are based on IVD tests for its ability to deliver accurate diagnosis, prognosis and monitoring. This signifies a huge potential for relatively low cost tests, which will, in turn, greatly reduce the burden of diseases that cost healthcare ecosystems billions of dollars every year.

HIV/AIDS remains a prominent disease being tackled at the highest levels; at the end of 2013, 35 million people were living with HIV worldwide.

The UN Millenium Development Goals (MDG) has sought to provide universal access to HIV/AIDS treatment, while simultaneously implementing initiatives in hopes to eradicate the disease. Back in 2001, the WHO estimated that inadequate blood screening had resulted in 1 million new HIV infections worldwide, stressing the importance of HIV diagnostic adoption. WHO has been working with countries to implement the Global Health Sector Strategy on HIV/AIDS for 2011-2015.

Source: AdvamedDx

IVD enables timely and accurate diagnosis, enables reduction in the IVD enables timely and accurate diagnosis, enables reduction in the IVD enables timely and accurate diagnosis, enables reduction in the

By Applications (2014)

1. AUTOIMMUNE DISEASES

INFECTIOUS DISEASES

Highest Revenue Generating Segments

USD 21.23 billion in 2020

5. NEPHROLOGY

2. CANCER/ONCOLOGY

6. CARDIOLOGY

3. DRUG TESTING

7. DIABETES

4. HIV/AIDS

8. OTHERS

Global IVD Market

Approximately 60% of all medical decisions are based on IVd tests for its ability to deliver accurate diagnosis, prognosis and monitoring.

Source: AdvaMedX


IVD Demand is Growing Globally

Incidence reduction rate globally due to the use of IVD Economic benefits of using IVD

Owing to its benefits, there is steady growth in IVD adoption and usage worldwide. Increasing incidence rates of infectious diseases, and the rising incidence of cancer are just some of the key external factors driving IVD demand globally, especially in the Molecular Diagnostics and Immunochemistry segments. The current global IVD market size was over USD 55 billion in 2014, and is expected to reach USD 75 billion by 2020. North America is still the largest market, comprising 40% of the total IVD industry globally. Meanwhile, Asia is the fastest growing region, with China and India leading the charge. The main driving forces for the increased uptake in IVD in these emerging economies is increased government funding and improved healthcare facilities.

Average Staph infection treatment cost of USD 19,000 can be reduced by early detection of the disease.

Diagnosis, prognosis and early treatment of tuberculosis enables the reduction of treatment cost by ~20% by identifying underlying case quickly.

IVD enables early and rapid detection of the Sepsis and reduce the length of stay by average of ~7 days which translate to average cost saving of over USD 15,000 per person with severe Sepsis.

Usage of hs Troponin have allowed for physicians to confidently rule out 40% of patients suspected to have acute coronary syndrome; BNP biomarkers have shown 10% decrease in admission rates in patients with cardiovascular diseases (CVD); and Galectin-3 have assisted physicians in identifying heart failure patients with increased risk of hospital re-admission.

Reduction of Staph infection rate

Reduction of cervical cancer rate

Reduction of cancer reoccurrence rate and death rate

0

0

0

70 %

75 %

50 %

100

100

100

Global IVd

marketby value (2014)

Emerging countries

Developed countries

North America

Immunochemistry

Point of care diagnostics

Molecular diagnostics and self monitoring blood glucose

Hematology, tissue diagnostics and hemostastis

Point of Care (POC) diagnostics now leads the global IVD market in terms of IVD classification; POC includes tests used by healthcare professionals in hospitals, physician office labs, and health clinics. Molecular diagnostics follows POC IVD, and is the fastest growing IVD sector globally; molecular diagnostics includes products used to directly analyze nucleic acids for the detection of genetic disorders or infectious pathogens such as HIV or hepatitis viruses, virology, bacteriology, molecular blood donor screening, and genetic testing.

28%

25%

40%

35%

30%

15%

27%

Global IVd

marketby classification ( 2014)

Source: Advameddx, Emediicine, the European Diagnostic Manufacturers Association

Source: Reuters

Source: Reuters

8

HeAlTHCAre in the Middle East & North Africa

Regional Pressure Points

Healthcare expenditure per capita

Healthcare expenditure per capita

• Average life expectancy : ~72 years

• Average life expectancy : 80 years

• Average incidence of diabetes: ~11%

• Average incidence of diabetes: 6.9%

• Average mortality rate of CVD: 45%

• Average mortality rate of CVD is < 30%

Healthcare expenditure as a percentage of GDP

Healthcare expenditure as a percentage of GDP

Comparison of the Highest Healthcare Expenditures in MENA vs OECD countries (2014)

Health Average Across Gulf Region:

Health Average across OECD countries:

~USD 2,043

USD 9,146

~2.2%

~17.1%

~USD 1,067

USD 5,718

~5%

~11.3%

~USD 1,569

USD 5,006

~3.2%

~10.9%

~USD 808

~5%

Qatar

USA

Bahrain

Canada

UAE

Germany

Saudi Arabia

MenA countries

oeCd countries

The increasing population growth and the rising incidences of lifestyle diseases have put strains on the healthcare systems in the Middle East and North Africa (MENA) region. Although significant strides have been made in the healthcare sector over the years, the regional healthcare ecosystem suffers from low healthcare spending, low penetration of healthcare insurance, and relatively low levels of private healthcare involvement in comparison to countries in the Organisation for Economic Co-operation and Development (OECD).

Source: Solidiance Interviews and Analysis, Worldbank,OECD healthcare indicators, US National Library of Medicine


Benefitting from being one of the world’s wealthiest countries coupled with having to cater to a small population under 2.2 million people, Qatar leads the MENA region in healthcare expenditure per capita (USD 2,043 per person). Despite Saudi Arabia having invested amongst the highest percentage of national GDP on healthcare in the region (approximately 5%), the Kingdom of Saudi Arabia (KSA) only ranks 4th in the region on healthcare expenditure (KSA: USD 808 per person). When comparing the top Middle Eastern countries against top OECD countries in healthcare expenditures, there is a significant gap. The USA invests over 11 times that of Saudi Arabia’s healthcare expenditure per capita, while Canada and Germany invests over 7 times and 6 times, respectively. The low incidence rates of disease and mortality, and longer life expectancies found in the OECD countries are attributed to the higher levels of healthcare expenditures. OECD countries also put an emphasis on primary healthcare - which involves early diagnosis and prevention.

A report found that in a sample GCC country, less than ~5% of patients with diabetes have their blood sugar levels controlled, highlighting the strong need for primary healthcare care, including health screening and diagnostics in the region.

10

HeAlTHCAre Trends In sAudI ArAbIADemographic Shifts in Saudi Arabia

Total population of KSA in million


Fertility rate of KSA (Child born/woman)

Saudi Arabia’s healthcare system is facing significant pressures driven by a growing aging population, which can be attributed to increased national life expectancy and a decreasing national fertility rate. Life expectancy has increased nearly 35 years over the past half-century, from an average 42 years in 1950 to 76 years in 2014. Medical care services used by adults rises with age, and per capita expenditures on healthcare are relatively high among older age groups worldwide.

In addition, while Saudi nationals have started to live much longer lives, families have shrunk considerably in size, from an average 7 children per woman in 1950 to 2.17 in 2014. This has put some distress on the societal fabric of Saudi Arabia, where the financial responsibility and burden of caring for aging parents has significantly increased, yet distributed across fewer family members than in the past. All things considered, Saudi Arabia still has amongst the fastest growing populations in the world.

2010

20050

1

2

3

4

5

2010

2011

2006

2015

2012

2007

2020e

2013

2008

2025e

2014

2009

2030e

2015e

2010

2035e

2016e

2011

2040e

2017e

2012

2045e

2018e

2013

2050e

2019e

2014

2020e

27.56

5%

28.38

7%

29.2

8%

29.99

10%

30.77

12%

31.39

15%

32.01

17%

32.65

20%

33.31

23%

33.97 34.65


% Share of population over 60 years old

Fertility rate of KSA ( Child born/woman)

Source: Solidiance interviews and Analysis ,Statista, United Nations, index Mundi


Lebanon

23%Jordan

16.3%Egypt

26.3%

Saudi Arabia

24%

UAE

37.3%

Kuwait

23%

Saudi Arabia

26.1%

Qatar

24%

With >6.9 million diabetics in the Kingdom of Saudi Arabia, the country has the highest incidence rates of diabetes in the MENA region, at 24%. KSA also has the second-highest incidence rates of cardiovascular diseases (CVDs) at 26.1%. This high incidence rate can be attributed to increasingly sedentary lifestyles, unhealthy high-in-sugar diets, and the rising consumption of tobacco.

High Incidence Rates of Lifestyle Related Diseases

Countries with highest hypertension prevalence rate in MENA region (2014)

Countries with highest diabetes prevalence rate in MENA region (2014)

Source: Solidiance Interviews and Analysis

12

It has been reported that an estimated 30% of all diabetics in Saudi Arabia are unaware of having the disease. Saudi Arabia’s healthcare expenditure for diabetes per person is USD 800 per person. Taking into account the 24% prevalence rate in the Kingdom, diabetes accounts for nearly 1/4th of the country’s total healthcare expenditures.

A hospital-based study in Saudi Arabia reported that there are lengthy stays of ~45 days for stroke rehabilitation programs, attesting to the economic and resource drain on the healthcare system in responding to and managing a population that is susceptible to stroke.

It is therefore not unusual that the Saudi Government has started to invest in disease prevention programs in an effort to curb the incidence rate of these lifestyle diseases, which carry a significant burden on the Kingdom’s healthcare and financial resources. Tobacco is one such pressure-point for the country. In 2012, Saudi Arabia was reported to be the 4th largest importer of tobacco in the world. The Saudi Ministry of Health (MOH) reports between 35-45% of all adult males and 24% of preparatory school students in Saudi Arabia are tobacco smokers. It is estimated that the social, health and economic burden of tobacco use in Saudi Arabia costs the Kingdom up to SAR 5 billion (USD ~1.3 billion) each year. In an effort towards national smoking cessation, the government ordered a royal ban on smoking in all government facilities, and most indoor public spaces in 2012. More recently, at the end of 2014, all forms of smoking were banned within the city limits of Saudi’s two most holiest cities: Mecca and Medina. The ban also prohibits the sale of tobacco products within city limits.

diabetes accounts for nearly 1/4th of the country’s total healthcare expenditures.


[saudi Arabia] has adopted a religiously inspired and radical policy approach to strengthening tobacco control.“ -World Health Organization (WHO) Report 2014, A Smoke-Free City Case Study: Mecca and Medina, Saudi Arabia

14

The increasing economic burdens of lifestyle diseases in Saudi Arabia make the case clear for enhanced IVD usage in the Kingdom. Enhanced prevention programs, integrated healthcare systems, and most importantly regular diagnostics for early detection of disease can significantly reduce the burdens on both the healthcare system and the patient.

3.6

2.52.63

2010

2011

2012

2013

rising cigar

import value in billions

in SAR

Rising cigar import value in billions SAR

Though Saudi Arabia currently has a relatively low cancer incidence rate, the country must also be ready to face the challenge of a foreseeable increase in cancer cases, mainly attributed to the aging population. Dr. Ashwaq Al Olayyan, the Head of the Adult Tumor Department at King Abdulaziz Medical City has issued warnings to the public that though incidence rates are still low in comparison to Western societies, a rise in cases in Saudi is being witnessed. Currently, the treatment of a cancer patient in the Kingdom costs nearly SAR 1 million per year (USD ~267,000), placing another financial burden on the country.

Though cancer incidence rates are still low in comparison to Western societies, a rise in cases in saudi, especially in cases of colon cancer, is being witnessed. It is important to establish preventative mechanisms to combat the disease, most especially through advanced diagnostics for early detection.

“-

Dr. Ashwaq Al Olayyan, Head of the Adult Tumor Department at King Abdulaziz Medical City

Source: Euromonitor


Government facilities tend to be of higher quality than private healthcare facilities in saudi Arabia; the private healthcare ecosystem has significant variability in the service and quality of healthcare provided.

“-

Dr. Ahmed El Eisa, Supervisor General, Department of Medical Services, Ministry of Interior

In order to meet the demands being placed on the current Saudi Healthcare infrastructure, expansion of overall healthcare services and laboratory facilities are required. The pressure for growth are particularly great in the private healthcare system, due to the manner in which Saudi’s overall healthcare system provides different access based on employment; either in the private sector or public sector.

The MOH and other government-affiliated hospitals (i.e. military hospitals or public-private hospitals such as those run by the state-owned oil and gas giant, Saudi Aramco) make up 77% of Saudi’s available healthcare infrastructure. These hospitals and facilities are constructed specifically to provide free healthcare to government and government-affiliated employees and their families.

Growing Demand for Private Healthcare Services

Ministry of Health

Public labs Private labsOther government hospitals

Private healthcare

60%

40%

60%17%

23%

% split of

healthcare service

in KSA2014

% split of

laboratory factory

in KSA2014

Source: Solidiance Analysis and Interviews, International Journal of Business and Economic Development, The Economist intelligence 2014

16

Private healthcare, on the other hand, only makes up 23% of the country’s available healthcare infrastructure, but caters to the lion’s share of the population. Expatriates (~30% of the population) and private sector employees (~35% of the population) and their families only have access to the private healthcare sector. Laboratories have a similar imbalance, with 60% of laboratories in Saudi Arabia being government-affiliated, while only 40% are privately-run.

In Saudi Arabia, contrary to findings in many other developing nations, publicly-run hospitals are perceived to have higher quality healthcare than the private sector. In the Kingdom, this seems to be due to investments made by the government and better standardization across public hospitals. Dr. Ahmed El Eisa, a Supervisor General of the Department of Medical Services at the Ministry of Interior notes that, “the private healthcare ecosystem (in contrast to the public healthcare facilities) has significant variability in the service and quality of healthcare provided.”

The Saudi Arabian Government has already rolled out plans to expand public healthcare facilities across the country, but has also begun to encourage the development of the private healthcare sector to support the government and shoulder public demand by means of offering financial aid for expansion of both private hospitals and private labs.

Dr. M. Iqbal Musani, the Chairman of the Department of Laboratory Medicine from the Al Jedaani Group of Hospitals highlighted the demands being placed on the Saudi healthcare infrastructure by saying, “due to government hospitals often running at full capacity, there is some spillage that is graciously offered to some private sector healthcare players, such as Al Jedaani Group of Hospitals.” Despite the private healthcare sector helping to alleviate pressures in the public healthcare system, the same does not seem to apply for laboratory work. Dr. Iqbal continues, “laboratories in the public sector are fully equipped, while the private sector is still playing catch-up. There are times when the private laboratories require the assistance of the government-run labs to run diagnostics on special cases, due to lack of sophisticated laboratory infrastructure in the private labs.”

There is definitely an upward trend of IVd adoption in saudi Arabia, and it is expected to continue as increased funding and support is being graciously provided by the government. There is an emphasis on improving the private healthcare sector, and this should help to address the current gap between the sophistication of public versus private laboratories in the country.

“-

Dr. M. Iqbal Musani, Chairman, Department of Laboratory Medicine at Al Jedaani Group of Hospitals


Strategic Healthcare Investments by Government

In order to bolster private-sector participation in the healthcare sector, the government is offering loans to build healthcare infrastructure at favorable rates; this is also being applied to smaller loans to attract investors for smaller clinics in rural and ‘underserved’ towns. Despite these efforts, progress is slow – and challenges abound. Challenges include a shortage of available land to procure for the construction of healthcare facilities. Some experts have also expressed concern that the rapid expansion plans of Saudi’s healthcare infrastructure may compromise on quality; in 2014, 33 private healthcare facilities were shut down by the authorities for violating health rules.

The Saudi Government is not taking its healthcare challenges lightly; in 2015, Saudi Arabia increased its healthcare budget by 49% from SAR 107 billion (approx. USD 28.5 billion) in 2014 to SAR 160 billion (approx. USD 42.7 billion) in 2015. This significant healthcare budget increase is ear-marked for (a) the expansion of healthcare facilities, (b) the development of an integrated e-healthcare system, and (c) enhancing primary healthcare centers and diagnostic laboratories across the country.

The government has announced plans to construct over 100 new public and private hospitals to meet current demands in the coming years. The government is also pushing the uptake of integrated e-health systems, which will ensure that medical files including diagnostics results are linked across all hospitals. By the end of 2015, the government aims to achieve a hospital beds-to-population ratio of 3.50 beds per 1,000. The five medical cities under construction will add 6,200 new hospital beds in the country alone; and the Ministry of Health has reported an expected 21% increase in the number of primary healthcare centers from the 2,279 in 2013 to 2,750 centers by 2020.

Primary healthcare centers

2010 2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e 2020e0

2000

4000

Primary healthcare centers Linier (Primary healthcare centers)

saudi Arabia increased its healthcare budget by 49% from sAr 107 billion (approx. usd 28.5 billion) in 2014 to sAr 160 billion (approx. usd 42.7 billion) in 2015.

Source: Solidiance Interviews and Analysis, Ministry of Health KSA

18

Finally, the government’s e-health initiative seeks to install a data center at the Saudi Ministry of Health, linking 22 regional health directorates, 166 hospitals, and more than 40 hospital management centers across the region. In order to implement this large-scale project, significant investments in healthcare IT across the country’s healthcare infrastructure can be seen. The Kingdom’s IT expenditures reached SAR 15 billion in 2014 (USD 4 billion).

In addition, the government has been working towards universal health insurance, and hopes to have all Saudi Nationals and expats covered by private health insurance by 2016. Though the government has required all expats working for the private sector be covered by private health coverage since 2001, it has only been in the past 12 months that the same program has been extended to public-sector employees. This strategic move by the government should drive up demand for private healthcare services, in turn potentially attracting private-sector investment in the healthcare sector. This initiative has shown a significant growth in the Saudi Insurance Market, having grown from SAR 3 million (approx. USD 800,000) in 2007, to SAR 21 million (approx. USD 5.6 million) in 2015. The Saudi Arabian insurance industry has remained one of the fastest growing insurance industries across the world.

KSA Insurance Market (in SAR Million)

2007 2008 2009 2010 2011 2012 2013 2014 20150.0

5.0

10.0

15.0

20.0

25.0

3.0

5.0

7.5

9.010.5

12.014.5

17.5

21.0

~19%

~41%

Source: Solidiance Interviews and Analysis, Analyst Report, Saudi Arabian monetary agency


By 2018, Saudi Arabia’s population is forecasted to increase by 2 million, while the aging population (persons >60 years of age) will grow from 7% to 8%. The prevalence of diabetes is expected to continue to increase from its current 24%, and other lifestyle diseases are expected to grow and add pressure to the current healthcare infrastructure.

IVD will play a critical role in the integrated healthcare system proposed by the Saudi Government, enabling operation efficiency and cost-savings across public and private healthcare ecosystems. IVD reduces unnecessary inpatient stays by enabling early detection of diseases and hence allowing provision of timely treatment to patients.

It is clear that Saudi Arabia is expected to continue facing sharp increases in healthcare needs, which will in turn result in the rapid growth of the IVD market. Currently, only 1% of the overall healthcare expenditure in Saudi Arabia is spent on IVD, and is expected to grow to 1.5% by 2020. Despite this growth, 1.5% is still comparatively lower than the global average (i.e. 2% of global healthcare expenditure is spent towards IVD), indicating further that there is room for significant growth in Saudi’s IVD market.

In response to the growing demands being placed on the Kingdom’s healthcare system, the government has set-out to implement key initiatives, including increasing insurance coverage towards a “universal coverage” system, the construction of 30-50 major hospitals by 2016, and increasing private-sector involvement and investment in healthcare services. All of these initiatives also point to a clear demand and forecasted growth for IVD in the Kingdom.

THe role of IVd In sAudI ArAbIA

Universal healthcare insurance means that more and more people in Saudi Arabia will be able to get IVD tests as part of the insurance coverage. Government initiatives to enhance private sector involvement in the healthcare industry will translate to faster growth in hospital and laboratory infrastructure. Currently, 70% of the laboratory infrastructure in the Kingdom is considered basic labs, and this infrastructure is expected to see dramatic improvement by 2018.

All things considered, the Saudi Arabia IVD market is growing at a CAGR of 6.5% and is projected to reach USD ~500 million by 2018. Meanwhile, the greatest growth in IVD will be seen in the private sector, as private infrastructure growth will be emphasized over the course of the next 3-5 years. Moreover, current private laboratory infrastructure remains less equipped in comparison to public laboratories. Private Labs are growing at a rate of 10% CAGR, and is projected to cater to 45% of the market by 2018.

IVd in saudi Arabia is a technology definitely worth investing in. referrals on IVd are growing as there are more laboratories and physicians.

“-

Dr. Ahmed El Eisa, Supervisor General, Department of Medical Services, Ministry of Interior

20

ConClusIonIt is clear that the Saudi government has made strides to increase healthcare spending in recent years. Further increase in spending will be needed in order to bridge the gap between the quality of healthcare that is evident in OECD countries in comparison to Middle East countries such as Saudi Arabia. GCC countries, including Saudi Arabia, currently rely heavily on government funding; the Saudi government accounts for 65% healthcare spending in the country. Saudi Arabia has also been heavily subsidizing private healthcare institutions and have aggressively promoted expanded health insurance to promote the development of the private healthcare ecosystem. Increased private-public partnerships for the development of hospitals, clinics and laboratories are required in order to develop the sustainable healthcare ecosystem Saudi Arabia needs.

Furthermore, due to the growing demands and higher expectations from patients, many more laboratories are also seeking to become internationally and nationally accredited to ensure better quality of laboratory services; for the same reasons, a significant trend of outsourcing in vitro diagnostics to the private sector is also emerging in Saudi Arabia. There is no question that the Kingdom is geared for growth in the healthcare sector. IVD is one healthcare segment that is expected to see significant increases over the coming 5 to 10 years. In the short-term, IVD will provide the much needed operational efficiencies and provide some level of relief to the currently strained and over-stretched healthcare system.

In the medium-term, IVD offers significant cost reduction opportunities for the government, and further provides higher-quality healthcare to Saudi’s population, which is increasing in demand. IVD will deliver efficient preventative care through integrated screening programs, offering early detection and in turn reducing disease incidence rates and mortality rates.

In the medium to longer-term, we should expect to see innovative medical technologies, infrastructure and approaches being adopted by Saudi Arabia in order to bring greater efficiency, optimized services, and lead to significant cost-cutting. Rather than duplicate prohibitively expensive laboratory services and complex test algorithms, many hospitals and healthcare organizations will be looking to consolidate services and utilize expertise available in the region – and cross-regional collaborations may also increase. Saudi Arabian healthcare providers may also begin to assess digital technologies and digital laboratories in order to offer better test menus for patients, cut-down on response times for second opinions, and offer more sophisticated testing through alignment with larger, well-established, and internationally accredited institutions.

The future looks bright for IVD in Saudi Arabia, it is only a question of how fast it can be adopted and implemented in order to provide the benefits the country – both in terms of the government and its people – needs and desires.


referenCes1. Advameddx

2. Analysts Reports on Saudi Healthcare from Booz consulting

3. Anglo Info

4. Arab News Agency

5. Boehringer Ingelheim

6. CNN

7. Emedicine

8. Gov.UK

9. ICU Management. Org

10. Index Mundi

11. International Journal of Business and Economic Development

12. Investors reports of Roche

13. Journal of the Saudi Heart Association

14. Marsh Saudi Arabia Insurance and Reinsurance Brokers

15. Medlab magazine

16. Ministry of Health, KSA

17. OECD healthcare indicators

18. PR newswire

19. Reuters

20. Saudi Arabian Monetary Agency

21. Statista

22. The Business Year

23. The Economist 2014- Saudi Healthcare

24. The Economist intelligence 2014

25. The European Diagnostic Manufacturers Association

26. US National Library of Medicine

27. World bank

King Abdul-Aziz Medical City-RiyadhNational Guard Health AffairsMinistry Of National GuardKingdom Of Saudi Arabia

Documents

The Role of In Vitro Diagnostics (IVD) in Saudi Arabia’s ... THE CONTRIBUTION, VALUE AND FUTURE OF IN VITRO DIAGNOSTICS (IVD) IN SAUDI ARABIA’S HEALTHCARE SYSTEM I. An Introduction